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02/28/2013

EU to cap bankers bonuses

The 99 per cent are fighting back.

The EU is a step closer to imposing bonus caps on bankers - a move many see as a way to calm public anger over hefty pay outs to big money earners being blamed for the financial mess plaguing most of Europe.

An agreement, reached late Wednesday in Brussles, means bankers could only receive bonuses worth two times their salaries.  

Some say this is the toughest limit ever imposed. It applies to Europe-based employees of any bank, and, to staff of those banks wherever they are based - be it London, New York or Hong Kong.

The cap went over like a lead balloon in Britain, the largest financial centre in the EU. Britain is struggling to get the country out of recession by imposing harsh austerity cuts - many on the backs of the working poor, critics say.

In the words of London Mayor Boris Johnson, Reuters reports he said: "This is possible the most deluded measure to come from Europe since Diocletian tried to fix the price of groceries across the Roman empire."

Somebody has a long memory. Diocletian was a Roman emperor at the end of the 3rd Century.

And in Latvia, a country that saw its economy tank after one of its three big banks failed, British Prime Minister David Cameron who was visiting the country said they would carefully examine the legislation to make sure it can be "flexible enough to allow those banks to continue competing and succeeding in the U.K."

No doubt, if the legislation is passed by the EU's 27-member states, this will be more fodder for the anti-EU movement in Britain. Cameron has pledged to hold an "in or out" vote on staying in the EU if he wins the next election in 2015.

With files from Reuters

Tanya Talaga is the Star's Global Economics reporter. Follow her on Twitter @tanyatalaga

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